Reining in Growth in Health Spending

1. Reining in Growth in Health Spending

2. Webinar basics • How do I ask questions during the webinar? • Recorded webinar and PowerPoint slides will be available after the webinar. • Special thanks to our funders:

3. Your presenters Amy Downs Senior Director for Policy and Analysis Sara Schmitt Director

4. Our Vision CHI is a trusted and leading source of credible health information for Colorado leaders. Our insight is used to: • Inform policy • Contribute to effective implementation • Support state efforts to improve health

5. Three Take-Aways • Colorado’s health care costs are increasing steadily but not uniformly, much like the rest of the U.S. • Colorado is testing several models and methods for reining in health spending. • Building the evidence base for reforming health spending takes time, patience and realistic expectations.

6. Trends and Why They Matter

7. Why Are You Most Concerned About Rising Health Spending? • Limits public funds for non-health programs • Reduces employer ability to invest in job growth and wages • Prevents low income individuals from accessing care • Cost of care is not impacting the outcome of care • Not concerned about increases in health spending

8. Health Care: A Growing Share of the GDP

9. Employers and Employees Bear the Burden SOURCE: Medical Expenditure Panel Survey

10. Family Premiums: Employees Face Largest Increase

11. Health Insurance Premiums Compared to Other Economic Indicators

12. Drivers of Health Care Spending

13. Health Care Expenditures: A Simple Equation Unit Price * Quantity of Units = Expenditures

14. Health Care Cost Drivers • System pays for volume • Insurance drives utilization • Wealthier countries afford more services • Aging population increases disease prevalence • Inefficiencies abound SOURCE: Health Care Costs: Key Information on Health Care Costs and their Impact, Kaiser Family Foundation, 2009

15. “Hot Spotters”

16. The Skewing of Health Expenditures

17. Hot Spotting: The Elderly Annual Cost Per Capita

18. What Are We Doing To Address Costs?

19. Which Strategy is Most Effective in Controlling Health Spending? A. Bundled Payments B. Care Coordination C. Gain-Sharing/Shared Savings D. Global Payments E. No idea, that’s why I’m on the webinar

20. Continuum of Evidence: From Research to Program Implementation

21. Models for Reining in Health Spending • Care Coordination • Gain-Sharing/Shared Savings • Bundled Payments • Global Payments

22. Care Coordination: Medical Homes

23. Colorado Medical Home Efforts

24. Medicaid Accountable Care Collaborative

25. Care Coordination: Impact on Controlling Costs • Preliminary estimates on cost savings show some decreases in utilization but data are limited • Colorado programs still being evaluated, early returns and national results encouraging • Complex, lengthy, resource-intensive process for practices to become medical homes

26. Models for Reining in Health Spending • Care Coordination • Gain-Sharing/Shared Savings • Bundled Payments • Global Payments

27. Gain-Sharing/Shared Savings

28. Colorado Efforts • Accountable Care Organizations • Provider networks that are responsible for controlling costs through rewards and penalties • Pioneer ACO Model • Commercial Payers • Medicaid

29. Models for Reining in Health Spending • Care Coordination • Gain-Sharing/Shared Savings • Bundled Payments • Global Payments

30. Bundled Payments • Bundled payment is fixed amount to providers for specific episode of care. • RAND – of payment reform ideas modeled, bundled payments hold greatest promise • Heart bypass Medicare bundling demonstration • 10% decline in bypass surgery costs

31. PROMETHEUS Pilot Program in Colorado • Pilot implemented by Health Care Incentives Improvement Institute and Colorado Business Group on Health • Testing bundled payments concept in San Luis Valley, Boulder/Longmont, Colorado Springs • Providers financially encouraged to reduce potentially avoidable complications (PACs)

32. Models for Reining in Health Spending • Care Coordination • Gain-Sharing/Shared Savings • Bundled Payments • Global Payments

33. Global Payment

34. Continuum of Evidence: From Research to Program Implementation

35. Which Strategy is Most Effective in Controlling Health Spending? A. Bundled Payments B. Care Coordination C. Gain-Sharing/Shared Savings D. Global Payments E. Even after the webinar I’m still not sure

36. Three Take-Aways • Colorado’s health care costs are increasing steadily but not uniformly, much like the rest of the U.S. • Colorado is testing several models and methods for reining in health spending. • Building the evidence base for reforming health spending takes time, patience and realistic expectations.

37. Inner City Health Center,Denver Amy Downs 720.382.7091 downsa@coloradohealthinstitute.org Sara Schmitt 720.382.7081 schmitts@coloradohealthinstitute.org

38. Upcoming Webinars • July 11 – The Supreme Court and Health Reform: Implications for Colorado • August 1 – Addressing the Boomer Challenge: Long-term Services and Supports All webinars are at noon. Register here: bit.ly/KFIP0P